my mortgatge is 5 yr interest only but is 30 yr variable /adj rate. 3rd yr is up.after 3rd yr pymnt goes up?
by Mortgage Rates on Friday, September 24th, 2010 | 2 Comments
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I believe you are correct – it’s the 6 Month LIBOR + your APR. This can cause it to go into the double digits (libor was at 5 last year!!). So, if you had a 6% APR and LIBOR is at 2.74, your new rate is 8.74% I went thru this a few months ago myself and I can’t the letter I got from the bank but I do think you are correct about the formula. Now, it’ll reset again every 6 months for the life of the loan (at least mine did) so now would be a good time to re-finance into a fixed rate.
Good finance question! I know of an organization that gives up to $1500 to people to help them with their rent or mortgage. It’s available in most US cities, I highly suggest you check it out.
http://www.we-mortgage-help-rent.org
Best of Luck.